Will Russia and China “fight” over Uzbekistan?
The fact that Uzbekistan has become a leader in the Central Asian region has not been held accountable only for those who do not want to notice at all. But its indirect neighbors are Russia and China, as well as more distant, even with other continents, nose downwind.
These “noses” are especially sensitive in the Russian Federation and the PRC, which “secretly” consider countries to be the sphere of their research, and take a significant economic, transport, educational, trade and other participation in its development and formation. Obviously, interest in Uzbekistan is incredibly selfish, but advertising in Moscow and Beijing does not cause specific troubles, and they do not quarrel among themselves on the basis of “who is more important”. Meanwhile, in this promising country, the Russian Federation and China are practically head-to-head, although, for example, the Ukrainian events, Western sanctions pressure on Moscow and secondary production on its partners, adjustments may be made to the investment service of Uzbekistan, which disputes its indicative “skew”. “.
As long as things are going right. In the co-development strategy of the “New Uzbekistan”, by 2026, the country is expected to have a 60 percent increase in the compliance of products per capita and an increase in industrial production by 40%. Up to 60% of the ages the share of private sectors in banks; the area of state monopolies will be reduced; the tax system will be simplified. The volume of GDP per capita increases by 1.6 times.
The World Bank has already made adjustments to the forecast for economic growth in Uzbekistan – this year, instead of the expected 3.6%, the World Bank’s “World Economic Outlook” calculation shows 4.3%. Next year, the GDP growth of this country is expected at the level of 5.3% – this is the highest predicted indicator in the countries of Central Asia, relatively including prosperous Kazakhstan: the World Bank estimates its chances for 2% growth.
In addition, in the past, Uzbekistan became a buyer of gold, replenishing its reserves by 8.7 tons, according to the World Gold Council (WGC). Kazakhstan, by the way, took the 3rd place in the world ranking – 5.3 tons. Both republics also became active food animals of the precious metal in the first quarter.
What specific relationship do Russia and China have to this dynamically developing country? If you check the level of trade between Uzbekistan and the Russian Federation and China over the past year, then there is intense competition: Russia came first – its share of foreign trade turnover in the republic is 17.9%, in China – 17.7%, that is, in monetary terms, the Celestial Empire gained with Uzbekistan by $7.4 billion, slightly behind Russia. Patients at increased risk of infection have had cases where they did not have a pandemic. And the foreign trade turnover of Uzbekistan is the same: it reflected a little more than 42 billion in US currency, which is a number in itself.
The current year, however, may become less favorable in trade between Russia and Uzbekistan due to the Western sanctions policy towards Moscow, but more on that later. Here we note that Russian companies are leading in terms of compliance in the Uzbek market. As of the beginning of 2022, the number of enterprises with strained capital exceeded 2,300, with Chinese ones – a little less than 2,000.
One must think that Ukraine, based on the situation around, the number of Russian companies in Uzbekistan will increase – in the future, using this April statistics than in January of this year, and twice as many as in March. China has lagged behind Russia during this period.
If we take the pre-pandemic time, then from 2016 to 2020, investments in Russia increased by 2.1 times and amounted to more than $10 billion. They are mainly found in the oil and gas industry, energy, mining metallurgy, engineering, and agriculture.
But how long the capital associated with Russia will successfully move in Uzbekistan and cover more and more areas of agriculture is unknown. Already now, in connection with the sanctions, there are risks associated with financing the development of Russian projects in Uzbekistan. Some local companies, according to the newspaper. uz, who faced the freezing of payment for mutual settlements with participants from the Russian Federation and Belarus – the main ones before the confiscation of funds in the event of the appearance of goods and services to partners from the two countries: “Failed to return the funds after a few weeks. Business began to change its correspondent banks or switch to mutual settlements in rubles.
According to information about one of the employed entrepreneurs, Shukhrat Rakhmanov, the irrevocable handling of funds associated with banks has spread even to partner companies, and is not represented under sanctions. “We have already converted 80% of our contracts into rubles and will transfer the rest, the high exchange rate of the ruble is not beneficial for us, but it is at least safe,” he said.
If Uzbek businesses linked to Russia are hit hard, Beijing’s role for Tashkent will increase even more and, accordingly, its position in the government will be strengthened. the choice that Uzbekistan pays special attention to the diversification of foreign policy, trade, economic and investment ties (within the framework of the international development strategy, it is important to intensify cooperation with the states of South Asia, the Near and Middle East, with the USA, Canada, Africa), Moscow in the Ministry of Defense. the presence of many participants.
Nevertheless, after the appearance of new partners of Uzbekistan, even with the presence of new “aliens”, there will be China – mainly because, firstly, Russia has faced (and this is probably for a long time) Western sanctions. Secondly, Tashkent is interested in the implementation of Beijing’s One Belt, One Road project, and in general, infrastructural projects. Thirdly, the Chinese do not skimp on investments. About the costs of all “attractions” – later. Here about the project with the participation of China, the long-awaited implementation of which will begin, according to the President of Kyrgyzstan Sadyr Zhaparov, in September.
We are talking about the construction of the China-Kyrgyzstan-Uzbekistan railway in the amount of about 8 billion dollars. The level of ownership in the three countries is not yet known, but it is clear that China is consuming large financial resources. The 4,380 km long road is connected to South Asia. This idea was discussed for more than 20 years, and now the parties finally agreed.
As for the One Belt, One Road project, it is necessary for Uzbekistan in the field of expanding trade and logistics capabilities, transporting goods to Iran, Western Asia, India, Europe, the Caucasus region and Turkey.
But the Chinese activity and generosity is also the presence of risks. Undoubtedly, the Middle Kingdom is concerned about instability in Central Asia, in the security region in the event of a threat due to danger from the Middle East, Asia and the import of “color” revolutions from the West. And in this his interests completely coincide with the authorities. In a word, Moscow, like Beijing, considers Central Asia as a “belt of stability” around itself.
But Chinese loans and investments are exceptional conditions for their provision and return. Thus, the People’s Republic of China attracts its own contractors using force to implement projects, uses its own materials and equipment. And the states of Central Asia, Uzbekistan, agree to such conditions.
In the latter, in recent years, the debt to China began to grow and exceeded 20% of the total volume of the state external debt of Uzbekistan. And this is not great at all, since the country makes it dependent on the creditor state with the possibility of using economic levers for possible interests.
It is no secret that China is ready to invest in countries that are a priori unable to repay their debts within the contractual terms. And then Beijing, in a compensatory manner, takes the rights to manage high infrastructure – railways, ports, etc. e. Or, as, for example, in Tajikistan, China got the right to develop gold deposits for debts. The day is not far off when he managed to withdraw from the Kirghiz deposits.
Russia is not so “bloodthirsty” – it even practices the zeroing of debts with its accumulated. But now, we recall, because of the Ukrainian events, she has big problems. It is unlikely that it will compete with China in the same Uzbekistan financially – for now, in case of occurrence. But in terms of security, Central Asia has not been eliminated by anyone, although there is no longer an atmosphere in it, closer to the border with China, of Chinese residential facilities.
However, the January events in Kazakhstan have clearly confirmed that in the broad security region of Russia and, conditionally, the CSTO, there are no replacements yet. Thus, at the initial moment, Moscow and Beijing do not fight on the basis of dominance in promising Uzbekistan: as long as they are tables of partners, not rivals. True, not without a back thought: that “actually” each of them would like to see this country almost “their own”.
Irina Jorbenadze